What is an Insider?
An insider is an employee, director or any other person who is privy to confidential, nonpublic information about a company.
How Does an Insider Work?
Given their position, managers and executives within a company are privy to information about a company's operations that is not available to the investing public. The news and details of an upcoming merger or special dividend that have not yet been announced are two examples of insider information. Once information has been made public by the company, it is no longer considered "insider" information.
Why Does an Insider Matter?
Individuals with access to insider information have an unfair advantage in the market. Using this information to base a trade is an illegal practice known as "insider trading."
It is also illegal for a person with insider information to pass it to a third party so that they may use the information to profit.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
In times where interest rates are on the rise, you may start hearing financial advisors and bankers sing the praises of an income strategy called "CD laddering" (short for certificate of deposit...Read More →
You've probably heard for years that it's a waste of money to buy rental car insurance. It's just another way to get gouged,...Read More →